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CONFEDERATE  STATES  OF  AMERICA, 

Treasury  Department, 
Richmond,  July  24th,  1861. 
Hon.  Howell  Cobb, 

President  Congress,  C.  S.  A., 

Sir: 

In  conformity  "with  the  requirement  of  Congress,  I 
have  endeavored  to  procure  information  from  the  various 
State  Governments  in  regard  to  the  value  of  the  property, 
the  revenue  system,  and  the  amount  collected  during  the  last 
fiscal  year  in  each  of  the  Confederate  States.  The  revenue 
system  adopted  in  the  several  States  is  so  difficult  that  it  is 
impossible  to  reduce  it  into  one  form.  Even  the  valuation  . 
of  lands  in  some  of  them  is  made  upon  an  arbitrary  rule, 
without  reference  to  their  real  value.  Some  of  the  States 
levy  a  poll  tax  on  each  slave ;  others  value  them,  and  impose 
an  ad  valorem  tax.  The  subjects  of  taxation  in  each  State 
are  so  various  that  they  can  be  classified  only  by  rejecting 
all  except  the  principal  items,  which  are  set  forth  in  the 
accompanying  schedule.  I  have,  therefore,  concluded  that 
I  would  best  promote  the  design  of  Congress  by  ascertaining 
as  nearly  as  possible  the  value  of  the  general  items  thus 
classified,  and  leaving  out  the  various  subjects  of  which  no 
return  is  made  in  many  of  the  States.  I  have  accordingly 
caused  to  be  compiled  a  table  exhibiting  the  value  of  the 
principal  subjects  of  taxation  in  the  several  States. 

It  is  proper  to  add  that  many  of  these  results  are  only 
approximations.  In  South  Carolina  no  return  of  the  value 
of  lands  has  been  made  since  1840,  and  I  have  assumed  an 
increase  of  75  per  cent,  on  that  valuation  as  the  present 
value.  Neither  is  there  in  several  other  States  any  valua- 
tion of  negroes,  and  in  others  where  negroes  are  valued,  only 
those  within  certain  ages  are  included.  I  have,  therefore, 
been  obliged  to  resort  to  the  census  for  the  number,  and  to 
assume  a  general  standard  of  valuation,  which  is  set  down 
at  say  $600  per  head. 

The  property  set  down   under  the  head  of  merchandise  is 
also  irregular.     In  some  of  the  States  the  stock  of  merchan- 
dise on  hand  is  valued,  and  in  others  the  sales  only  are- 
returned;  and  in  others  again,  the  sales  are  distributed  into* 
sales  by  auction,  by  private  venders,  and  under  license. 


It  appears  evident  from  this  statement-  that  Congress  will 
not  be  able  to  adopt  a  plan  of  taxation  resting  upon  the 
revenue  system  of  the  States,  but  will  be  compelled  to  adjust 
for  itself  a  scheme. 

If  a  proportion  were  established  by  which  the  relative 
amount  to  be  paid  by  each  State  could  be  adjusted,  then  a 
simple  per  centage  upon  the  last  tax  paid  by  each  State 
would  offer  the  simplest  of  all  modes  of  rating  the  tax.  The 
State  machinery  could  then  be  invoked,  and  the  subjects  of 
taxation  having  already  been  adjusted  according  to  the  Avishes 
of  each  State,  the  tax  would  assume  the  form  to  which  its 
citizens  had  already  been  accustomed.  Under  the  perma- 
nent Constitution  the  ratio  for  the  payment  of  direct  taxes 
is  adjusted  in  proportion  to  numbers,  and  if  that  ratio  be 
applied  by  Congress  to  the  tax  now  to  be  raised  under  the 
Provisional  Government,  it  will  then  only  be  requisite  to 
ascertain  the  amount  of  tax  to  be  raised. 

It  is  feared,  however,  that  a  direct  tax  raised  upon  this 
basis  will  impose  too  heavy  a  burthen  upon  those  States 
which  are  least  able  or  willing,  under  existing  circumstances, 
to  pay  large  sums.  The  Provisional  Constitution  leaves 
Congress  free  to  levy  taxes  in  any  mode  which  may  be 
deemed  expedient,  and  I  would  respectfully  suggest  the 
expediency  of  raising  the  amount  required  by  an  ad  valorem 
tax  upon  property. 

We  have  not  in  our  possession  the  returns  of  the  last 
census ;  but  from  a  general  statement  made  by  the  Secretary 
of  the  Treasury  of  the  United  States,  it  appears  that  the 
gross  value  of  property  in  the  States  of  this  Confederacy  is 
$5,202,176,109.  A  tax  of  only  fifty  cents  on  each  hundred 
dollars  of  property  would  raise  twenty-six  millions  of  dollars. 
This,  of  course,  includes  property  of  all  kinds,  and  if,  in 
each  State,  distinct  returns  has  been  made  upon  the  same 
basis,  there  would  be  little  difficulty  in  assessing  the  tax. 
But,  as  has  already  been  stated,  no  such  returns  exist,  and 
the  attempt  to  procure  them  would,  in  those  States  where 
they  have  never  been  made,  produce  much  vexation  and  dis- 
content. A  better  course  would  seem  to  be  to  disregard  all 
minor  subjects  of  taxation,  and  impose  the  tax  by  a  per 
centage  upon  those  articles  which  are  generally  owned  in  all 
the  States,  and  are  considered  by  us  as  proper  to  be  taxed. 

The  schedule  herewith  furnished  gives  sufficient  informa- 
tion to  attain  this  end.  It  brings  within  the  scope  of  the 
taxing  power  property  valued  at  $4,632,160,501,  leaving 


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out  about  six  hundred  millions  as  the  value  of  non-enume- 
rated articles.  As  this  last  amount  includes  articles  which 
are  probably  distributed  in  equal  portions  over  the  different 
States,  no  inequality  or  injustice  will  result  from  leaving  it 
free  of  tax ;  and  it  simply  remains  to  ascertain  the  amount 
of  tax  required  for  the  use  of  the  Government,  and  to  create 
the  machinery  requisite  to  collect  it.  This  machinery  need 
not  be  different  from  that  used  by  the  State  Governments, 
unless  some  of  their  laws  forbid  the  use  of  their  State 
officers.  It  is  only  necessary  to  appoint  assessors  and  col- 
lectors in  the  various  districts  in  the  manner  indicated  by 
previous  acts  of  Congress.  In  respect  to  the  amount  of  tax 
to  be  raised,  the  events  which  have  occurred  since  the 
adjournment  of  Congress  require  a  larger  sum  than  was 
then  supposed.  At  least  twenty-five  millions  of  dollars 
ought  to  be  raised  for  the  wants  of  the  Government,  and  to 
sustain  its  credit  in  taking  up  the  loans  which  will  become 
necessary.  There  should  be  a  supply  of  means  abundantly 
sufficient  to  pay  the  interest  and  part  of  the  principal  of 
such  loans  at  stated  periods.  To  raise  this  amount,  a  tax 
of  fifty-four  cents  per  cent,  on  the  property  set  forth  in  the 
schedule  will  be  sufficient.  The  property  selected  for  such 
taxation  is  classified  under  the  following  heads  : 

1. — Slaves. 

2. — Real  Estate. 

3. — Merchandize. 

4. — Bank  Stocks. 

5. — Railroad  and  other  Stocks, 

6. — Money  at  Interest. 
It  is  not  improbable  that  Congress  may  prefer  that  differ- 
ences should  be  made  in  the  rate  assessed  upon  these  various 
items. 

1.  As  to  slaves.  These  constitute  the  chief  item  of  value 
in  Southern  property,  and  may  themselves  be  considered  as 
indicating  an  ability  in  the  owner  to  pay.  They  never 
belong  to  persons  who  do  not  own  other  property ;  and  inas- 
much as  the  scheme  of  taxation  recommended  exempts  much 
of  this  other  property,  the  amount,  assessed  upon  slaves  may 
properly  be  so  much  larger.  The  origin  and  character  of 
the  war  in  which  we  are  engaged  would  seem  to  make  this 
species  of  property  more  particularly  bound  for  its  support. 
I  assume,  therefore,  that  it  can  bear  the  highest  rate  of  tax. 

2.  Real  estate  offers  the  next  great  subject  of  taxation. 
This  naturally  divides  into  town  lot3  and  country  property. 


4 

The  former  are  in  many  of  the  States  subject  to  a  higher 
rate  of  taxation;  and  in  time  of  war  the  reasons  for  this 
increase  are  quite  as  strong  as  in  time  of  peace.  It  is  not 
practicable,  however,  to  present  a  separate  estimate  of  town 
property,  because  in  four  of  the  States  no  separate  return  is 
made  of  town  lots.  If  it  be  deemed  expedient,  therefore,  to 
vary  the  rate  of  taxation,  the  product  of  the  tax  will  be 
conjectural.  The  possession  of  land  is  not  as  distinct  an 
indication  of  ability  to  pay,  as  the  ownership  of  negroes. 
Much  of  it  is  unproductive,  and  where  it  is  cultivated  by 
the  owner  himself,  a  state  of  war  calls  him  away  from  its 
cultivation.  It  would  seem  proper,  therefore,  to  exonerate 
proprietors  under  a  certain  amount  from  the  tax. 

The  ownership  of  a  town  lot  is,  however,  generally  a  bet- 
ter indication  of  ability  to  pay,  than  the  ownership  of  mere 
land.  The  amount  of  taxes  usually  paid  by  towns  for  mere 
corporation  purposes,  clearly  exhibits  that  ability;  and  when 
we  consider  the  exposure  of  towns  to  the  dangers  and  cas- 
ualties of  war,  and  the  inducements  they  offer  to  the  inva- 
ding army,  it  seems  proper  that  they  should  bear  a  heavier 
burden  than  the  country  at  large. 

3.  For  somewhat  similar  reasons,  merchandise  on  hand 
for  sale  in  the  hands  of  merchants,  should  pay  an  increased 
rate  of  taxation.  The  merchant,  too,  has  the  ability  to  re- 
lieve himself  by  casting  the  tax  upon  the  consumer.  It  will 
be  necessary  to  assess  the  tax  on  the  stock  on  hand  at  the 
time  of  the  assessment,  in  order  to  attain  the  same  basis  of 
valuation.  The  want  of  proper  returns  makes  it  difficult 
to  set  down  in  figures  the  probable  amount  of  the  proceeds 
of  this  tax  ;  and  besides  this,  the  merchandize  now  for  sale 
in  the  country,  is  probably  greatly  less  in  quantity  than  at 
any  period  referred  to  in  the  tables. 

4.  The  remaining  items  of  stock-'  and  money  at  interest, 
present  a  subject  more  difficult  to  deal  with.  Many  of  the 
railroad  and  canal  stocks  produce  but  little  revenue  to  the 
owners,  and  yet  of  all  the  items  of  property  within  a  coun- 
try, the  stocks  and  money  at  interest  depend  most  upon  the 
stability  and  good  faith  of  the  Government.  The  owners 
have  nothing  in  possession  but  script  or  some  instrument  in 
writing,  which,  through  the  instrumentality  of  Government, 
secures  to  them  values  which  extend  to  millions  of  dollars. 
It  seems  highly  proper,  therefore,  that  when  the  existence 
of  the  Government  is  threatened,  these  stocks  should  con- 
tribute.to  the  common   defence  an  amount   equal  in  propor- 


tion  to  the  visible  landed  property  of  the  country ;  and,  for 
the  same  reason  that  the  tax  on  land  is  laid  upon  the  capi- 
tal instead  of  the  income,  it  is  proper  that  it.  should  be  laid 
upon  the  capital  stock  of  these  corporations. 

On  the  other  hand,  it  is  to  be  considered  that  the  banks 
and  railroad  companies  have  in  general  exhibited  a  spirit  of 
liberal  and  generous  patriotism.  The  railroad  companies 
have  been  content  to  work  for  the  Government  at  half  price, 
and  to  take  pay  in  Confederate  Bonds.  The  banks  have 
offered  their  means  and  credit  freely  to  the  country,  and  are 
entitled  to  the  kindliest  considerations  of  the  Government. 
The  stocks,  therefore,  of  these  various  corporations  should  be 
put  on  the  same  footing  with  the  general  property  of  the 
citizens. 

The  only  additional  aid  which  I  can  offer  to  the  delibera- 
tions of  Congress,  is  contained  in  the  tables  herewith  sub- 
mitted, which  show  the  difference  produced  in  each  State, 
as  one  or  the  other  mode  of  assessing  the  tax,  may  be 
adopted. 

All  of  which  is  respectfully  submitted. 

C.  G.  MEMMINGER, 

Secretary  of  Treasury. 


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